Should You Be Benchmarking?

As recently as fifteen years ago, I was often asked by many of my clients to help them benchmark their internet service provider (ISP) against their peers. By this, they wanted to know if they had the right number of employees for their customer base, if their revenues and expenses were in line with other similar ISPs, if they had too much expense from overheads, etc. It turns out that ISPs were not particularly comparable. They seemed to differ in most of the statistics that my clients wanted to understand. Interestingly, a lot of the folks with significantly different metrics considered themselves to be successful. Some of the reasons that ISPs differed in metrics was due to the way they purposefully operated.

• ISPs differed significantly in their commitment to fix customer problems. Some of my clients didn’t react to customer outages after hours and on weekends, while some had a philosophy of not going home for the day until customer issues were resolved.
• Some clients purposefully kept functions in-house rather than outsource for a lower cost due to a commitment to keep jobs for long-time employees.
• Some ISPs set rates as low as possible to benefit the public, while others strove to maximize profits.
• Some of my clients used software to automate processes as much as possible, while others kept the same methods in place that had worked for decades.
• Some clients spent extra money to have pension plans and top-notch health insurance for employees while others were less generous.
• Some of my clients were fully leveraged with debt to take advantage of growth opportunities, while others took pride in being debt free.
• Some clients served highly rural areas where a truck toll to visit any customer was a huge time-eater.

These kinds of differences make it nearly impossible to make a side-by-side comparison of two ISPs, even ones with the same number of customers.